Meet the newest cord cutters: college campuses

TV isn’t coming back to school at Northwestern University this fall: The college decided earlier this year that it was going to turn off its campus-wide television service over the summer. “The decision to discontinue NUTV was the result of many factors including demonstrated non-use by our students,” said Northwestern University Information Technology Director Wendy Woodward when asked about the end of the program.

Northwestern University isn’t the only school questioning whether it should keep spending money on TV services, considering that students prefer to stream their shows from online services instead. The growing popularity of Netflix (s NFLX) and other streaming services on campus also has system administrators looking for better ways to manage all that traffic. But with cable TV being not cool enough for school, are colleges accelerating cord cutting trends? Or can new campus-focused services get students excited about TV again?

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Netflix is big on campus

By far the biggest winner of shifting TV consumption habits on campus seems to be Netflix. (s NFLX) The streaming service now accounts for up to 30 percent of all residential downstream internet traffic in the U.S. during peak times, and it’s starting to have an impact on college campus networks as well.

That’s why Internet2, the super-fast next-generation research network interconnecting college campuses across the country, struck a peering agreement with Netflix a year ago. As a result, Netflix streams are now delivered over Internet2’s infrastructure, thereby significantly lowering bandwidth costs for participating universities. Internet2 has been offering this kind of peering for traffic from a number of the internet’s biggest brands, including Amazon (s AMZN) and Google, (S GOOG) since 2006. Experts estimate that getting this traffic from Internet2 as opposed to commercial providers cuts colleges’ bandwidth costs in half.

Some schools are going even further, directly partnering with Netflix to put the company’s Open Connect caches within their campus networks. Open Connect boxes regularly download the most popular content from Netflix’s servers and then stream them locally to viewers. A Netflix spokesperson declined to comment on any cooperations with universities when contacted for this story, but we have heard that a number of campuses already have Open Connect boxes deployed, thereby allowing their students to watch Netflix in SuperHD.

Tivli wants to keep students watching

But Netflix isn’t the only one trying to help colleges with their streaming students. Boston-based startup Tivli is betting that students will continue to watch TV, if you package it the right way. “College students love television — they just don’t watch it on televisions,” Tivli CEO Christopher Thorpe said during an interview this week. Tivli started as a bit of an experiment on Harvard’s campus, when its founders were figuring out how to capture over-the-air television and then stream it to rooms of friends in their dorm.

The experiment took off, and Harvard helped the team to launch a campus-wide test in early 2011. Since then, Tivli has expanded to over a dozen campuses, and is now serving “thousands of students,” according to Thorpe.

To be fair, Tivli isn’t the first effort to stream TV on campus networks. Northwestern’s now-defunct NUTV also offered some basic streaming — but Tivli is trying to make the experience comparable to a internet-based streaming service like Netflix. The company is serving up streams on PCs and Roku boxes, offers unlimited DVR recording capability, and wants to add mobile clients next. And like Netflix, Tivli is deploying its technology locally, allowing campuses to serve up streams from within their network, thereby lowering their bandwidth bills.

Tivli’s web interface.

Tivli is also using schools’ existing contracts with cable or satellite providers, adding authentication to make sure that only students whose fees have been paid for get access to the offering. That’s one of the reasons networks love the service, to the point where HBO joined in on the company’s recent $6 million Series A round of financing. Tivli now wants to use that money to add dozens of more schools, and eventually even expand beyond campus.

Today’s students: tomorrow’s cable customers?

Even with services like Tivli, the question remains: Will students ever subscribe to a traditional cable service once they graduate and move out of their dorm room? Thorpe thinks so, arguing that people will continue to get access to the shows and games they like to watch.

He also admitted that they might be turned off by the traditional cable experience with its grid guides and set-top boxes after being used to stream everything on campus, but added that TV providers are catching up quick with TV Everywhere offerings and efforts to take live TV feeds online. In a way, campus TV experiments could point towards the future of pay TV in general.

Of course, there’s always another option. Used to piece together their own programming from online sources, students could decide that they don’t want to spend high cable bills, and instead invest their money elsewhere. That, coincidentally, is exactly what Northwestern University just did. The school is spending money it saves with the end of its TV service on improving its Wi-Fi infrastructure.

I’m afraid this article is somewhat misleading. NUTV appears to be an ethernet-streaming service offered by Northwestern’s IT unit (NUIT). Students remain fully able to subscribe to the various cable packages offered locally via Comcast. I saw no data about declining cable usage on the Northwestern campus, just the anecdotal reports on students’ usage and enjoyment of video (much of it produced by broadcast and cable networks) on their laptops, tablets and mobile devices.

The key fallacy in the article’s conclusion is that cord-cutting is a reality. This is about a university service that most students didn’t use. According to Nielsen reports on student viewing, they still watch TV, on traditional sets and all the new devices. It’s a distinction that makes a difference.

I mentioned in the story that NUTV was offering streaming, sorry if that was unclear. As for cord cutting being real, that’s something that is now commonly acknowledged to be the case by most analysts and many industry executives. The size and impact of the phenomenon is something one can have a healthy debate about, of course.